Home values ​​dip modestly as market competition eases and inventory rises – RISMedia

This year’s housing market has been filled with its fair share of surprises, as conditions shifted from their pandemic-induced frenzy to what forecasters said would revert to seasonality.

While part of that forecast predicted a slowdown in price growth over the past two years, new data from Zillow suggests that home values ​​fell slightly from June to July – arguably an event no one expected. at the beginning of 2022.

In his latest market reportZillow researchers found that the typical value of a home in the United States fell by $366, or 0.1%, in July, bringing the price down to $357,107, based on the raw index of Zillow Home Value (ZHVI).

This is the first monthly decline since 2012, according to experts at Zillow, who indicate that monthly growth in value has gradually slowed since April 2022, when index growth peaked at 1.9%.

As the market rebalances, the report says competition for homes is waning amid heightened affordability barriers plaguing buyers that are shutting many out of the housing market.

The largest monthly declines in home values ​​were seen in San Jose and San Francisco, down 4.5% and 2.8%, respectively. Phoenix and Austin were popular locations during the pandemic, but saw their values ​​drop 2.8% and 2.7%, respectively.

The cost of rent in the United States has also started to stabilize after several months of rapid growth. Rent increases eased to 0.6% month-over-month growth in July, with the typical monthly rent standing at $2,031.

Homebuyers still looking for a home gained more time to research and consider their options as the median number of days to wait for listings jumped two days in July to 10 days. While the report notes that’s almost two weeks less than July 2019, the extra time gives buyers a better chance of seeing price drops.

Data from Zillow shows housing stock rose 5.1% month-on-month, while new inventory fell 13.6% month-over-month in July. While total inventory is growing rapidly, it is still 43.5% below July 2019.

Highlights:

  • S. Home values ​​fell 0.1% from June to July, the first drop in the Zillow Raw Home Value Index since 2012.
  • Home values ​​fell last month in 30 of the 50 largest metropolitan areas, but are still up 16% from a year ago.
  • The increase in inventory is due to homes lingering on the market and new listings lagging pre-pandemic levels.
  • It took 10 days for a listing to be put on hold in July, two days longer than in June.
  • Rent appreciation is slowing, but the rate of growth remains well above pre-pandemic levels.

Take-out:

“It might come as a surprise to see home values ​​flatten so quickly after recent record growth, but it’s a much-needed rebalancing that gives buyers more options, more time to shop, and more bargaining power,” said Zillow chief economist Skylar Olsen. “This slowdown is for discouraged buyers pulling back after the affordability shock of rising rates. As prices come down, many will renew their interest and we will continue our progress towards ‘normal’. With buyers ready to exit once confidence returns, owners can expect to retain the majority of the capital gains they have seen over the past two years.

“Inventory, the pool of homes available during a given window, is highly sensitive to easing demand and slowing sales, posting the largest seasonal month-over-month increases for all homes this year. May, June or July never registered. However, the flow of houses on the market is slowing. High interest rates are likely preventing current owners from deciding to register as they compare their current rate – and their home – to what can be found in the market, keeping inventory well below pre-pandemic norms despite slowing sales,” Olsen added.